How Much Should You Save for Retirement?
There's no single right number, but simple rules of thumb can tell you if you're on track. Here's how much to save each year, savings targets by age, how to estimate what you'll need, and what to do if you're behind.
By Pond.com editors Updated 3 min read
Quick answer
- A common guideline is to save about 15% of your pre-tax income each year for retirement, including any employer match.
- At minimum, contribute enough to get your full employer 401(k) match.
- Rough milestones are about one times your salary saved by 30, three times by 40, six times by 50 and ten times by 67.
- The 4% rule suggests you need roughly 25 times the yearly amount you'll draw from savings.
- If you're behind, raise your rate a little each year and use catch-up contributions after age 50.
"How much should I save?" is one of the most common money questions, and the honest answer is that it depends on when you want to retire, how you want to live and what other income you'll have. Still, a few simple rules of thumb can tell you whether you're roughly on track.
This article is general information, not financial advice.
How much to save each year
A widely used guideline is to save about 15% of your pre-tax income for retirement each year, including any employer match. If your employer adds 4%, you'd contribute about 11%.
If 15% isn't possible yet:
- Contribute at least enough to get the full match. It's free money. See what is a 401(k) match?
- Raise your rate by 1% a year, or every time you get a raise, until you reach 15%.
Starting later means saving a higher share; starting early means compounding does more of the work.
See how your money could grow Try different amounts, returns and time frames. Open calculatorSavings targets by age
These milestones, popularized by Fidelity, are a quick check (multiples of your salary):
| Age | Saved for retirement |
|---|---|
| 30 | 1× salary |
| 40 | 3× salary |
| 50 | 6× salary |
| 60 | 8× salary |
| 67 | 10× salary |
They assume you retire around 67 and want to keep a similar lifestyle. Treat them as a rough guide, not a pass or fail.
Estimating what you'll need
- Estimate your yearly spending in retirement. Many people use 70% to 80% of their pre-retirement income as a starting point.
- Subtract other income, like Social Security and any pension. Check your estimate at ssa.gov.
- Multiply the gap by 25. This comes from the 4% rule, which suggests you can withdraw about 4% of your savings in the first year of retirement, then adjust for inflation, with a good chance it lasts 30 years.
Example: you expect to spend $60,000 a year and get $24,000 from Social Security. The gap is $36,000. Times 25 is $900,000.
If you're behind
- Increase contributions gradually; even 1% more makes a difference over decades.
- Use catch-up contributions once you're 50 or older, which let you put extra into 401(k)s and IRAs.
- Cut investment fees, for example with low-cost index funds. See index funds explained.
- Work a little longer or delay Social Security, which raises your monthly benefit.
- Avoid early withdrawals, which usually mean taxes and penalties.
Common questions
No. You'll need to save a higher share of your income, but you still have years of contributions and growth ahead. People 50 and older can also make extra catch-up contributions to 401(k)s and IRAs.
Social Security is income in retirement, so it reduces how much you need from savings. Check your estimated benefit at ssa.gov with a my Social Security account, and plan for savings to cover the gap.
Usually both. Get your full employer match first, then focus on high-interest debt like credit cards, then raise retirement savings. Low-interest debt like many mortgages doesn't need to come before retirement saving.